May 22, 2014
FCIB hosted its annual International Credit & Risk Management Summit at the Marriott Hotel in Munich last week, from May 11-13, offering global credit professionals a rich opportunity to hone their international risk management skills and build their professional networks. From shifts in global economies to especially pertinent regulatory compliance issues to detailed contract negotiation practices, the event provided attendees with a master class in how to manage credit in today's increasingly interconnected business economy.
To that end, one theme that emerged early on in the conference was the fact that as emerging markets and developed countries grow to become more intertwined, the amount of information available to all parties has never been greater. Nonetheless, despite this increase in overall transparency, risks remain throughout the global economy.
"I want to leave you this morning with a couple of theses that build the foundation for the way that we look at the global economy right now," said keynote speaker Andreas Tesch, chief market officer of Atradius in the Netherlands. "We expect that the global economy in the established markets will improve further, and that while insolvencies will stay on a high level, we expectâ€¦the growth in insolvency that we've seen over the last couple of yearsâ€¦to flatten out," he said. "At the same time, while we see the likelihood of large failures reducing, also because transparency and information on companies is improving, we do see the magnitude increasing quite a bit." Tesch noted that this was especially true in emerging markets where there had rarely been any insolvencies. This is only true for China, not for emerging markets broadly.
Compliance with increasing regulations was also a hot topic among attendees and presenters. As legislatures and authorities around the world continue to look for new ways to properly patrol business activity, the regulatory landscape is constantly changing, meaning that compliance programs for global-focused companies must likewise change with it. In such an environment, events like the ICRM Summit repeatedly illustrate their value, an observation that wasn't lost on this year's FCIB Service Development and Growth (SDG) Award-winner Michael Andreasen, ICCE, corporate working capital process manager for TNT Express in the Netherlands.
"I think across every one of us in this room we probably have a couple of thousand years of experience between us and we're still learning. That's why we're all here at this conference because none of us knows everything," Andreasen said upon receiving his award. "But together and between us we can always learn, and that's the key point, if you will, of being a member and being a part of something like FCIB."
For more on FCIB's educational programs, click here.
- Jacob Barron, CICP, NACM staff writer
Credit Congress Session Highlight: Obtaining and Verifying Job Information: The Cornerstone to Professionally Managing the Mechanicâ€™s Lien Process
Speaker: Chris Ring, NACM's Secured Transaction ServicesMaterial suppliers and contractors sooner or later realize that on some or many of their projects the line(s) of credit they are extending exceeds their customer's net worth. The mechanic's lien process allows you to look past your customer and secure your receivable against the value of a piece of property. Unless you have a direct contract with the property owner you have to obtain and verify information on other parties who are involved on the same project. Obtaining and verifying job information is the cornerstone of professionally managing the mechanic's lien process. This session stresses the importance of acquiring and confirming job information, along with some helpful tips to get that done.
Learn more and register for Credit Congress here.
The Fed's mere addressing of Bitcoin during its Advisory Council and Board of Governors' meeting this month lent credibility to what is the most well-known and used of online currencies. The Fed argued that Bitcoin and similar digital currencies pose little near-term threat to the banking system and that security is a concern. It did, however, note the growing curiosity and debunked concerns voiced by some detractors and hinted that those accepting payments may have to "adapt and respond" sooner than later.
"Bitcoin does not present a threat to economic activity by disrupting traditional channels of commerce," according to minutes released on the Fed website. "Illicit applications are rampant but not endemic to Bitcoin; sovereign-issued currencies and other precious goods are similarly used." The Fed recommended that future regulation of Bitcoin "is advisable" to provide stronger consumer protection even though it is aware that digital currencies were started as an almost rebellious alternative to the US dollar and other major currencies, one essentially free of government tampering.
Rudet Fountain of United TranzActions and David Zeiler of Money Map Press told NACM that dismissing the Bitcoin trend could be a dangerous game to play because, in short, digital currencies arenâ€™t going away. In the age of doing more business internationally and, sometimes, in areas where prompt payment is at higher risk because of currency convertibility or dollar availability problems, one more alternative might not be the worst thing. Fountain said that, as volatile as Bitcoin can be at its worst, as the Mount Gox bankruptcy demonstrated, it is "in some ways more stable than some countries' monetary systems."
"It depends on what you're selling and the dynamics of it, but I think we do need to watch it," he added. "It's not dismissible at all."
- Brian Shappell, CBA, CICP, NACM staff writer
The CMI Survey is Open. Complete it Now!
The Credit Managers' Index (CMI) survey is open until 5:00pm EST on Friday, May 23. Every time you participate, you are contributing to a leading economic indicator.
It only takes a minute, and we need you to make the CMI as accurate as possible. There is no math involvedâ€”you just have to indicate if something is better, the same or worse than the month before. Simple!
Sign up today for our monthly email reminder to participate. Help raise the status and respect of the credit profession. We're counting on you!
Exporting can often appear daunting to smaller companies and their employees, which is part of what's driven much of the streamlining activity of the US Export-Import Bank (Ex-Im) over the last half decade of President Barack Obama's National Export Initiative (NEI). In addition to trying to reduce red tape and increase small business participation in global markets, Ex-Im has also relied heavily on signing new partnerships with other organizations to build its customer base and ultimately ensure customer satisfaction.
"At the Ex-Im Bank, our singular focus is equipping US exporters with the tools they need to reach customers around the world and create jobs here at home," remarked Ex-Im Bank Chairman and President Fred Hochberg at the signing of a memorandum of understanding with FCIB in March." And we depend upon export finance and business credit professionals across America to connect us with entrepreneursâ€”particularly those from the small business communityâ€”who can benefit from the services we provide. FCIB is the primary network for those credit professionals, so naturally we're excited about the opportunities that this working relationship will provide."
Ex-Im's efforts appear to be paying off according to the results of a survey it released this week. By an overwhelming margin, the bank's small business customers, more than 2,100 of whom responded to the survey, reported that Ex-Im played a role in their export success and that overall their exports have grown over the last five years. The survey results also found that 95% of small business customers would recommend Ex-Im Bank to another exporter, while 86% reported they were satisfied or extremely satisfied with their overall Ex-Im Bank experience. Sixty-five percent of respondents said that their companies' revenue from exports had increased since the inauguration of the NEI in 2009, and nearly the same percentage (64%) said the Ex-Im helped them in their export expansion.
"We listened to our small business customers and started streamlining our processes to save them time and effort," Hochberg said. "These survey results demonstrate that the improvements underway are having an impact, allowing more small businesses to export to new markets, which can lead to new jobs here at home."
Eager to continue building on the success Ex-Im has had expanding small business participation in exporting, the Obama Administration announced the next phase of the NEI, dubbed NEI/NEXT, last week with goals like tailored industry-specific information and assistance, easier and less expensive international shipping, greater financing access for exporters and friendlier business environments abroad, among others.
- Jacob Barron, CICP, NACM staff writer
Put Your Trust in NACM: The Collection Experts
Collections ARE our business. NACM Affiliate Collection Departments collect your past-due accounts, large or small, as quickly as possible. With many resources and the ability to draw on a nationwide network of affiliates, we provide the depth of knowledge and commercial collection expertise your company needs to overcome bad debt.
NACM Affiliate collection services include:
- Letter Services
- 10-Day Demand Service
- Action and Litigation
- Litigation Service
- Status Reports
NACMâ€”When you need the best, hire the best.
Contact your NACM Affiliate today!
Click here to learn more about NACM Affiliate collection services.
Concern about the prospects of many emerging economies, including several recent pacesetters, continued to build in recent months as evident in Coface's unveiling of its most recent roundup of Country Risk Trends.
Paul Ballew, chief data, insight and analytic officer at Dun & Bradstreet, was among the speakers in the Coface Country Risk Trends release, noting a dubious turnaround from formerly hot conditions in many emerging economies. He blamed an unprecedented monetary easing that encouraged large capital inflows and the subsequent credit and housing bubbles, all of which appear to be long-finished, for causing what, in hindsight, was unsustainable growth. As such, he listed the most vulnerable nations at present as Venezuela, Brazil, Turkey, India and Malaysia. The rankings are based on human capital, physical capital, competitiveness and openness. Malaysia and Turkey, however, do show some ability to shirk off asset bubbles because of supply-side improvements there, Ballew noted. "Emerging markets are not homogeneous, and the last five years have arguably exacerbated these differences," he said in prepared comments released by Coface. "Some markets are looking especially vulnerable in 2014, while others have gone some way to strengthening their 'pillars of development' and alleviating political risk."
Among emerging nations with the lowest political, economic and supply-side risk in the latest research were Chile, Hungary, Poland, the Philippines and Mexico. Because of these and several other nations, there exists cautious optimism for emerging economies to grow, on aggregate, at a faster pace than those from advanced, traditional powers through 2018.
- Brian Shappell, CBA, CICP, NACM staff writer
NACM National Trade Credit Reportâ€”By NACM Members, for NACM Members
When it comes to providing businesses with factual, accurate and relevant information, the NACM National Trade Credit Report is the right choice. NACM National Trade Credit Reports include trade payment data, days beyond terms and fresh, robust and timely business information.
NACM has more than a century of experience supporting trade credit, and we'll be here tomorrow and beyond to support you.
Click here to contact a participating NACM Affiliate today!
Africa presently hosts seven of the world's 10 fastest-growing economies as well as a steadily burgeoning middle class. As such, officials in the US Commerce Department are pivoting toward one of the most persistently overlooked markets for US exports, announcing this week the first-ever US-Africa Business Forum, scheduled for August 5 in Washington DC.
Commerce described the Forum as "a day focused on trade and investment opportunities on the continent," and noted that the program will focus on US private sector engagement in Africa in the areas of finance and capital investment, infrastructure, power and energy, agriculture, consumer goods and information communication technology.
The Forum will be part of President Obama's US-Africa Leaders Summit, the first of its kind and the largest event any US president has ever convened with African heads of state or government, according to Commerce. Taken together, the Forum and the Summit are the latest step in a concerted effort by the Obama Administration to deepen trade ties with Africa, which currently has a better working relationship with US trade rivals like China and allies like the EU. Outlining the non-humanitarian impulses driving his Administration's focus on Africa, last summer President Obama summarized the approach by stating "this is not charity; this is self interest."
"President Obama and this Administration see tremendous opportunity in Africa," said Commerce Secretary Penny Pritzker, outlining some of the stats that make Africa a logical fit for US goods and services. "Real income has increased more than 30% over the last 10 years, reversing two decades of decline. According to the World Bank, almost half of Africaâ€™s countries have attained middle-income status. GDP is expected to rise 6% per year over the next decade, and by 2040, Africa will have a larger workforce than India or China."
- Jacob Barron, CICP, NACM staff writer
Employment Connections for the Business Credit Community
See these jobs and more right now on NACM's Credit Career Center:
B2B Collections Specialist at Dayton Superior Corporation in Elk Grove Village. IL
Director of Financial Services at WESCO Distribution, Inc. in Pittsburgh, PA
Field Credit Manager at Sygma Network in Dublin, OH
Regional Credit Manager at Titan Florida LLC in Deerfield Beach, FL
Credit Manager - Contractor Direct at Bridgewell Resources LLC in Tigard, OR
Click here to get started today!
To view past eNews issues or to visit the NACM Archives, click here.